Is the Ride Over for Twitch?
This is a single insight from This Week in Apps #114 - Lots of Turbulence Ahead. Check out the full article for more insights.
Twitch has had a great run over the last few years. The streaming platform for gamers that's owned by Amazon was growing rapidly and seemed unbeatable. Then came COVID lockdowns, and Twitch was now being used for more than just games.
Downloads are nice, but if you've been following the newsletter for long enough, you know my thoughts about these platforms – it's all about creators. Twitch has a simple incentive for creators. It lets viewers reward streamers.
In 2020, in-app purchases across the App Store and Google Play in the US grew by 350%, from around $3.9 million in net revenue in January to $18 million in net revenue in December, according to our estimates.
Things got even better in 2021. Our estimates show that Twitch's net revenue in the US grew to $27 million in March and April. That's nearly 6 times higher than January of 2021.
But in October of 2021, a massive hack resulted in a big leak that exposed how much Twitchers were earning, and the good run ended.
Revenue dropped almost instantly, and Twitch was unable to recover, ending 2021 with $13 million in net revenue in the US, according to our estimates. A half of March!
Things didn't get better in 2022 either. In fact, April's revenue in the US was lower than January of 2021. Just $3.7 million of net revenue.
Can Twitch recover? I think the answer isn't a hard no, but it's also not a definite yes. Why? Because YouTube saw the opportunity and has been focusing more of its attention on gamers adding features that Twitch had and enticing them to switch over because it has more ways to monetize.
And why is YouTube so determined? Because TikTok has been stealing its creators. See what's going on here?
This vicious cycle is a good reminder that creators are the hot commodity these days. The platforms know it, and much like last year's streaming wars, I have a feeling we'll see platforms fighting over creators in 2022.
If you're a creator, now's a great time to double down and do more. That's my goal, so if you haven't already, please check out my YouTube channel.
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.
